Florida drivers trying to follow the changes in PIP – shorthand for personal injury protection in the event of a crash – might have experienced whiplash keeping track of the law’s demise and revival.
The state stopped mandating $10,000 in PIP coverage on Oct. 1. Days later, lawmakers approved legislation that makes PIP mandatory again, but not until Jan. 1.
Now that three-month suspension of the PIP requirement is about to end. Some drivers never lost PIP coverage and will see no change, but others will pay more for their insurance to get PIP back in their policies.
“It has been very confusing for folks, because it has been all over the place,” said Dan Tarantin, chief executive officer of Direct General Insurance Company, which sells insurance through the Florida No-Fault, Cash Register and Direct General brands. “I think there are a lot of people who don’t know about it really.”
Tarantin said the most vulnerable drivers are those who dropped PIP coverage after Florida’s no-fault auto insurance system expired on Oct. 1. In addition, he said drivers who bought auto insurance after Oct. 1 also might lack the coverage required by Florida law Tuesday.
Drivers who went without PIP coverage could save money. But Tarantin said when the requirement resumes Tuesday, the law has “real teeth.” Reinstatement fees for a suspended license range from $150 to $500, according to the Florida Department of Highway Safety and Motor Vehicles. By law, insurance companies must cancel the polices of drivers that do not have PIP and notify the department, which will then suspend those drivers’ licenses.
Florida had no-fault auto insurance since the 1970s. But some large insurance companies sought to end the law, saying it was riddled with fraud. They also said PIP forced drivers already covered by health insurance to pay unnecesarily for auto insurance for crash-related injuries.
By eliminating PIP, the average savings for a two-car family in Jacksonville would have been more than $290 per year, according to Floridians for Lower Insurance Costs, a coalition including several insurance companies.
Hospitals and health care providers fought to keep PIP, saying it provides crucial coverage for people who lack health insurance when they are treated for crash injuries. The Florida Hospital Association said hospitals received more than $350 million in PIP money last year.
The new law required insurance companies to notify their customers by Nov. 15 if their policy does not provide PIP coverage, according to the Florida Association of Insurance Agents. In those cases, the companies must amend the policies to add on PIP coverage starting Tuesday.
Morris Busbia, an agent for GEICO in Atlantic Beach, said he’s been fielding calls asking about a PIP-related increase in premiums. Some are puzzled, while others are angry, he said.
“A lot of people don’t understand that insurance companies don’t make the law,” he said.
A small number of insurance companies will have higher rates for PIP coverage in January than they did before Oct. 1, said Tom Zutell, spokesman for the Florida Office of Insurance Regulation. However, he said none of the state’s major companies have sought rate increase, so they will be charging the same premium for PIP.
“Most haven’t been tinkering with that because they think consumers are confused enough as it is,” he said.
PIP SCENARIOS
The best way to find out about your personal injury protection (PIP) coverage is by contacting your insurance company or agent. Here are three scenarios for drivers:
PIP coverage will start Jan. 1
Your company will add PIP to your policy and bill you accordingly, which could mean an increase in your premium. You must pay the additional premium to get the state-mandated PIP coverage. This could affect people who bought a policy after Oct. 1, or renewed a policy after that date without including PIP.
PIP coverage already in effect
Your policy retained PIP even after the old law expired Oct. 1. You won’t see an increase in your premium because you’ve been paying for the coverage all along.
You have no insurance
You’ve been violating the law even during the past three months because the state never dropped its requirement for $10,000 of property damage coverage. To comply with the law, you will have to get insurance for property damage, plus the $10,000 PIP coverage for medical expenses.
Sources: Direct General Insurance Company, Florida Association of Insurance Agents